Item 1A. Risk Factors.
An investment in
our securities involves a high degree of risk. You should consider carefully all of the risks described below, together with the
other information contained in this annual report before making a decision to invest in our securities. If any of the following
events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the
trading price of our securities could decline, and you could lose all or part of your investment.
Risks Relating to Business Operations,
Our Search for, and Consummation of or Inability to Consummate, a Business Combination
We are a newly incorporated company with no operating
history and no revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
We are a newly incorporated company with
no operating results. Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our
business objective of completing our initial business combination with one or more target businesses. We have no plans, arrangements
or understandings with any prospective target business concerning a business combination and may be unable to complete our initial
business combination. If we fail to complete our initial business combination, we will never generate any operating revenues.
Our
public stockholders may not be afforded an opportunity to vote on our proposed initial business combination, which means we may complete
our initial business combination even though a majority of our public stockholders do not support such a combination.
We may not hold a stockholder vote to approve
our initial business combination unless the business combination would require stockholder approval under applicable law or stock
exchange listing requirements or if we decide to hold a stockholder vote for business or other reasons. For instance, the NYSE
rules currently allow us to engage in a tender offer in lieu of a stockholder meeting but would still require us to obtain
stockholder approval if we were seeking to issue more than 20% of our outstanding shares to a target business as consideration
in any business combination. Therefore, if we were structuring a business combination that required us to issue more than 20% of
our outstanding shares, we would seek stockholder approval of such business combination. However, except as required by applicable
law or stock exchange rules, the decision as to whether we will seek stockholder approval of a proposed business combination or
will allow stockholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be
based on a variety of factors, such as the timing of the transaction. Accordingly, we may consummate our initial business combination
even if holders of a majority of our outstanding public shares do not approve of the business combination we consummate. Please
see “Proposed Business — Stockholders May Not Have the Ability to Approve Our Initial Business Combination”
for additional information.
If we seek stockholder approval of our initial business
combination, our initial stockholders, officers and directors have agreed to vote in favor of such initial business combination,
regardless of how our public stockholders vote.
Our initial stockholders, officers and directors
have agreed (and their permitted transferees will agree) to vote any founder shares and any public shares held by them in favor of our
initial business combination. As a result, in addition to our initial stockholders’ founder shares, we would need 10,781,251, or
37.5% (assuming all issued and outstanding shares are voted), or 1,796,876, or 6.25% (assuming only the minimum number of shares representing
a quorum are voted), of the 28,750,000 public shares sold in our IPO to be voted in favor of a transaction, in order to have such initial
business combination approved. We expect that our initial stockholders and their permitted transferees will own at least 20.0% of our
outstanding shares of common stock at the time of any such stockholder vote. Accordingly, if we seek stockholder approval of our initial
business combination, it is more likely that the necessary stockholder approval will be received than would be the case if our initial
stockholders and their permitted transferees agreed to vote their founder shares in accordance with the majority of the votes cast by
our public stockholders.
Your only opportunity to affect the investment decision
regarding a potential business combination will be limited to the exercise of your right to redeem your shares from us for cash,
unless we seek stockholder approval of such business combination.
At the time of your investment in us, you
will not be provided with an opportunity to evaluate the specific merits or risks of any target businesses. Additionally, since
our board of directors may complete a business combination without seeking stockholder approval, public stockholders may not have
the right or opportunity to vote on the business combination. Accordingly, if we do not seek stockholder approval, your only opportunity
to affect the investment decision regarding a potential business combination may be limited to exercising your redemption rights
within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public
stockholders in which we describe our initial business combination.
The ability of our public stockholders to redeem their
shares for cash may make our financial condition unattractive to potential business combination targets, which may make it difficult
for us to enter into a business combination with a target.
We may seek to enter into a business combination
transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain
amount of cash. If too many public stockholders exercise their redemption rights, we would not be able to meet such closing condition
and, as a result, would not be able to proceed with the business combination. In no event will we redeem our public shares in an
amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions, or any greater net tangible
asset or cash requirement which may be contained in the agreement relating to our initial business combination. Consequently, if
accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or such greater
amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related business
combination and may instead search for an alternate business combination (including, potentially, with the same target). Prospective
targets will be aware of these risks and, thus, may be reluctant to enter into a business combination transaction with us.
The ability of our public stockholders to exercise redemption
rights with respect to a large number of our shares may not allow us to complete the most desirable business combination or optimize
our capital structure.
At the time we enter into an agreement
for our initial business combination, we will not know how many stockholders may exercise their redemption rights and, therefore,
we will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption.
If our initial business combination agreement requires us to use a portion of the cash in the trust account to pay the purchase
price or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the trust account
to meet such requirements or arrange for third-party financing. In addition, if a larger number of shares is submitted for redemption
than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the trust account
or arrange for third-party financing. Raising additional third-party financing may involve dilutive equity issuances or the incurrence
of indebtedness at higher than desirable levels. The above considerations may limit our ability to complete the most desirable
business combination available to us or optimize our capital structure.
The ability of our public stockholders to exercise redemption
rights with respect to a large number of our shares could increase the probability that our initial business combination would
be unsuccessful and that you would have to wait for liquidation in order to redeem your stock.
If our initial business combination agreement
requires us to use a portion of the cash in the trust account to pay the purchase price, or requires us to have a minimum amount
of cash at closing, the probability that our initial business combination would be unsuccessful increases. If our initial business
combination is unsuccessful, you would not receive your pro rata portion of the trust account until we liquidate the trust account.
If you are in need of immediate liquidity, you could attempt to sell your stock in the open market; however, at such time our stock
may trade at a discount to the pro rata amount per share in the trust account. In either situation, you may suffer a material loss
on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to
sell your stock in the open market.
The requirement that we complete our initial business
combination within the prescribed time frame may give potential target businesses leverage over us in negotiating a business combination
and may limit the time we have in which to conduct due diligence on potential business combination targets, in particular as we
approach our dissolution deadline, which could undermine our ability to complete our initial business combination on terms that
would produce value for our stockholders.
Any potential target business with which
we enter into negotiations concerning a business combination will be aware that we must complete our initial business combination
within 24 months from the closing of our IPO, or February 8, 2023. Consequently, such target business may obtain leverage
over us in negotiating a business combination, knowing that if we do not complete our initial business combination with that particular
target business, we may be unable to complete our initial business combination with any target business. This risk will increase
as we get closer to the end of the timeframe described above. In addition, we may have limited time to conduct due diligence and
may enter into our initial business combination on terms that we would have rejected upon a more comprehensive investigation.
We may not be able to complete our initial business combination
within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would
redeem our public shares and liquidate, in which case our public stockholders may receive only $10.00 per share, or less than such
amount in certain circumstances, and our warrants will expire worthless.
Our initial stockholders, officers and
directors have agreed that we must complete our initial business combination within 24 months from the closing of our IPO, or February 8,
2023. We may not be able to find a suitable target business and complete our initial business combination within such time period.
Our ability to complete our initial business combination may be negatively impacted by general market conditions, volatility in
the capital and debt markets and the other risks described herein. For example, the COVID-19 pandemic continues to grow both in
the U.S. and globally and, while the extent of the impact of the pandemic on us will depend on future developments, it could limit
our ability to complete our initial business combination, including as a result of increased market volatility, decreased market
liquidity and third-party financing being unavailable on terms acceptable to us or at all. Furthermore, we may be unable to complete
a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings with potential
investors or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a
transaction in a timely manner. Additionally, the COVID-19 pandemic and other events (such as terrorist attacks, natural disasters
or a significant outbreak of other infectious diseases) may negatively impact businesses we may seek to acquire. It may also have
the effect of heightening many of the other risks described in this ‘‘Risk Factors’’ section, such as those
related to the market for our securities and cross-border transactions.
If we have not completed our initial business
combination within such time period or during any Extension Period, we will: (1) cease all operations except for the purpose
of winding up; (2) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares,
at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest (which
interest shall be net of taxes payable, and less up to $100,000 of interest to pay dissolution expenses), divided by the number
of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders
(including the right to receive further liquidating distributions, if any); and (3) as promptly as reasonably possible following
such redemption, subject to the approval of our remaining stockholders and our board of directors, dissolve and liquidate, subject
in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable
law. In such case, our public stockholders may receive only $10.00 per share, or less than $10.00 per share, on the redemption
of their shares, and our warrants will expire worthless. Please see “— If third parties bring claims against us, the
proceeds held in the trust account could be reduced and the per-share redemption amount received by stockholders may be less than
$10.00 per share” and other risk factors herein.
If we seek stockholder approval of our initial business
combination, our founders, directors, officers, advisors or any of their respective affiliates may enter into certain transactions,
including purchasing shares or warrants from the public, which may influence the outcome of our proposed business combination and
reduce the public “float” of our securities.
If we seek stockholder approval of our
initial business combination and we do not conduct redemptions in connection with our initial business combination pursuant to
the tender offer rules, our founders, directors, officers, advisors or any of their respective affiliates may purchase public shares
or public warrants or a combination thereof in privately negotiated transactions or in the open market either prior to or following
the completion of our initial business combination, although they are under no obligation or other duty to do so.
Such a purchase may include a contractual
acknowledgement that such public stockholder, although still the record holder of our shares is no longer the beneficial owner
thereof and therefore agrees not to exercise its redemption rights. In the event that our founders, directors, officers, advisors
or any of their respective affiliates purchase public shares in privately negotiated transactions from public stockholders who
have already elected to exercise their redemption rights, such selling public stockholders would be required to revoke their prior
elections to redeem their shares. The price per share paid in any such transaction may be different than the amount per share a
public stockholder would receive if it elected to redeem its shares in connection with our initial business combination. Additionally,
at any time at or prior to our initial business combination, subject to applicable securities laws (including with respect to material
nonpublic information), our founders, directors, officers, advisors or any of their affiliates may enter into transactions with
investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial
business combination or not redeem their public shares. However, such persons have no current commitments, plans or intentions
to engage in such transactions and have not formulated any terms or conditions for any such transactions. Please see “Proposed
Business — Permitted purchases and other transactions with respect to our securities” for a description of how such
persons will determine from which stockholders to enter into transactions with. The purpose of any such transaction could be to
(1) vote such shares in favor of the initial business combination and thereby increase the likelihood of obtaining stockholder
approval of the initial business combination, (2) reduce the number of public warrants outstanding or to vote such warrants
on any matters submitted to the warrant holders for approval in connection with our initial business combination or (3) satisfy
a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the
closing of our initial business combination, where it appears that such requirement would otherwise not be met. Any such transactions
may result in the completion of our initial business combination that may not otherwise have been possible.
In addition, if such purchases are made,
the public “float” of our Class A common stock or warrants and the number of beneficial holders of our securities
may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national
securities exchange.
If a stockholder fails to receive notice of our offer
to redeem our public shares in connection with our initial business combination or fails to comply with the procedures for tendering
its shares, such shares may not be redeemed.
We will comply with the tender offer rules or
proxy rules, as applicable, when conducting redemptions in connection with our initial business combination. Despite our compliance
with these rules, if a stockholder fails to receive our tender offer or proxy materials, as applicable, such stockholder may not
become aware of the opportunity to redeem its shares. In addition, the tender offer documents or proxy materials, as applicable,
that we will furnish to holders of our public shares in connection with our initial business combination will describe the various
procedures that must be complied with in order to validly tender or redeem public shares. For example, we may require our public
stockholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street
name,” to either tender their certificates to our transfer agent prior to the date set forth in the tender offer or proxy
materials documents mailed to such holders, or up to two business days prior to the scheduled vote on the proposal to approve the
initial business combination in the event we distribute proxy materials, or to deliver their shares to the transfer agent electronically.
In the event that a stockholder fails to comply with these procedures, its shares may not be redeemed. Please see “Proposed
Business — Tendering stock certificates in connection with a tender offer or redemption rights.”
Our public stockholders do not have any rights or interests
in funds from the trust account, except under certain limited circumstances. To liquidate their investment, therefore, our public
stockholders may be forced to sell their public shares or warrants, potentially at a loss.
Our public stockholders will be entitled
to receive funds from the trust account only upon the earliest to occur of: (1) the completion of our initial business combination,
and then only in connection with those shares of Class A common stock that such stockholder properly elected to redeem, subject
to the limitations described herein; (2) the redemption of any public shares properly submitted in connection with a stockholder
vote to amend our amended and restated certificate of incorporation (A) to modify the substance or timing of our obligation
to allow redemptions in connection with our initial business combination or to redeem 100% of our public shares if we do not complete
our initial business combination within 24 months from the closing of our IPO, or February 8, 2023 or (B) with respect
to any other provision relating to stockholders’ rights or pre-initial business combination activity; and (3) the redemption
of all of our public shares if we have not completed our initial business combination within 24 months from the closing of our
IPO, or February 8, 2023, subject to applicable law and as further described herein. In addition, if we have not completed
an initial business combination within the required time period for any reason, compliance with Delaware law may require that we
submit a plan of dissolution to our then existing stockholders for approval prior to the distribution of the proceeds held in our
trust account. In that case, public stockholders may be forced to wait beyond the end of such period before they receive funds
from our trust account. In no other circumstances will a public stockholder have any right or interest of any kind in or to the
trust account. Holders of warrants will not have any right to the proceeds held in the trust account with respect to the warrants.
Accordingly, to liquidate your investment, you may be forced to sell your public shares or warrants, potentially at a loss.
Our public stockholders are not be entitled to protections
normally afforded to investors of many other blank check companies.
Since the net proceeds of our IPO and the
sale of the private placement warrants are intended to be used to complete an initial business combination with a target business
that has not been selected, we may be deemed to be a “blank check” company under the U.S. securities laws. However,
because we have net tangible assets in excess of $5,000,000, we are exempt from rules promulgated by the SEC to protect investors
in blank check companies, such as Rule 419. Accordingly, investors are not be afforded the benefits or protections of those
rules. Among other things, this means our units are immediately tradable and we have a longer period of time to complete our initial
business combination than do companies subject to Rule 419.
If the funds not being held in the trust account are insufficient
to allow us to operate for at least the 24 months following the closing of our IPO, or until February 8, 2023, we may be unable
to complete our initial business combination.
The funds available to us outside of the
trust account may not be sufficient to allow us to operate for at least the 24 months following the closing of our IPO, or until
February 8, 2023, assuming that our initial business combination is not completed during that time. We expect to incur significant
costs in pursuit of our acquisition plans.
We believe that, the funds available to
us outside of the trust account are sufficient to allow us to operate for at least the 24 months following the closing of our IPO,
or until February 8, 2023; however, we cannot assure you that our estimate is accurate. Of the funds available to us, we could
use a portion of the funds available to us to pay commitment fees for financing, fees to consultants to assist us with our search
for a target business or as a down payment or to fund a “no-shop” provision (a provision in letters of intent or merger
agreements designed to keep target businesses from “shopping” around for transactions with other companies or investors
on terms more favorable to such target businesses) with respect to a particular proposed business combination, although we do not
have any current intention to do so. If we entered into an agreement where we paid for the right to receive exclusivity from a
target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might
not have sufficient funds to continue searching for, or conduct due diligence with respect to, a prospective target business. If
we are unable to complete our initial business combination, our public stockholders may receive only approximately $10.00 per share,
or less in certain circumstances, on the liquidation of our trust account and our warrants will expire worthless. Please see “—
If third parties bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption
amount received by stockholders may be less than $10.00 per share” and other risk factors herein.
If the net proceeds of our IPO and the sale of the private
placement warrants not being held in the trust account are insufficient, it could limit the amount available to fund our search
for a target business or businesses and complete our initial business combination and we will depend on loans from our founders
or management team to fund our search, to pay our taxes and to complete our initial business combination. If we are unable to obtain
such loans, we may be unable to complete our initial business combination.
Of the net proceeds of our IPO and the
sale of the private placement warrants, only approximately $1,000,000 is available to us initially outside the trust account to
fund our working capital requirements. If we are required to seek additional capital, we would need to borrow funds from our initial
stockholders, management team or other third parties to operate or may be forced to liquidate. Neither our initial stockholders,
members of our management team nor any of their respective affiliates is under any obligation or other duty to loan funds to, or
invest in, us in such circumstances. Any such loans may be repaid only from funds held outside the trust account or from funds
released to us upon completion of our initial business combination. If we are unable to complete our initial business combination
because we do not have sufficient funds available to us, we will be forced to cease operations and liquidate the trust account.
In such case, our public stockholders may receive only $10.00 per share, or less in certain circumstances, and our warrants will
expire worthless. Please see “— If third parties bring claims against us, the proceeds held in the trust account could
be reduced and the per- share redemption amount received by stockholders may be less than $10.00 per share” and other risk
factors herein.
Subsequent to our completion of our initial business combination,
we may be required to subsequently take write-downs or write-offs, restructuring and impairment or other charges that could have
a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause
you to lose some or all of your investment.
Even if we conduct extensive due diligence
on a target business with which we combine, we cannot assure you that this diligence will identify all material issues that may
be present with a particular target business, that it would be possible to uncover all material issues through a customary amount
of due diligence, or that factors outside of the target business and outside of our control will not later arise. As a result of
these factors, we may be forced to later write-down or write-off assets, restructure our operations, or incur impairment or other
charges that could result in our reporting losses. Even if our due diligence successfully identifies certain risks, unexpected
risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis. Even
though these charges may be non-cash items and not have an immediate impact on our liquidity, the fact that we report charges of
this nature could contribute to negative market perceptions about us or our securities. In addition, charges of this nature may
cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing debt held by a
target business or by virtue of our obtaining post-combination debt financing. Accordingly, any stockholders or warrant holders
who choose to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the
value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.
The grant of registration rights to our initial stockholders
and their permitted transferees may make it more difficult to complete our initial business combination, and the future exercise
of such rights may adversely affect the market price of our Class A common stock.
Pursuant to an agreement entered into in
connection with our IPO, and any agreement that may be entered into at or after the time of our initial business combination, our
initial stockholders and their permitted transferees can demand that we register the resale of their founder shares after those
shares convert to shares of our Class A common stock. In addition, (1) our initial stockholders and their permitted transferees
can demand that we register the resale of the private placement warrants and the shares of Class A common stock issuable upon
exercise of the private placement warrants and (2) holders of warrants that may be issued upon conversion of working capital
loans may demand that we register the resale of such warrants and the Class A common stock issuable upon exercise of the warrants.
The registration and availability of such a significant number of securities for trading in the public market may have an adverse
effect on the market price of our Class A common stock. In addition, the existence of the registration rights may make our
initial business combination more costly or difficult to complete. This is because the stockholders of the target business may
increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on
the market price of our Class A common stock that is expected when the securities described above are registered for resale.
Because we are neither limited to evaluating target businesses
in a particular industry, sector or geographic area nor have we selected any specific target businesses with which to pursue our
initial business combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.
We may seek to complete a business combination
with an operating company in any industry, sector or geographic area. However, we are not permitted ,under our amended and restated
certificate of incorporation to effectuate our initial business combination solely with another blank check company or similar
company with nominal operations. Because we have not yet selected or approached any specific target business with respect to a
business combination, there is no basis to evaluate the possible merits or risks of any particular target business’s operations,
results of operations, cash flows, liquidity, financial condition or prospects. To the extent we complete our initial business
combination, we may be affected by numerous risks inherent in the business operations with which we combine. For example, if we
combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected
by the risks inherent in the business and operations of a financially unstable or a development stage entity. Although our officers
and directors will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly
ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence. Furthermore,
some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks
will adversely impact a target business. We also cannot assure you that an investment in our units will ultimately prove to be
more favorable to investors than a direct investment, if such opportunity were available, in a business combination target. Accordingly,
any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business combination
could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for
such reduction in value.
We may seek acquisition opportunities in acquisition targets
that may be outside of our management’s areas of expertise.
Although we expect to focus our search
for a target business that is at the forefront of high technology and are enabling the future evolution of smart technologies,
such as 5G communication, virtual reality, artificial intelligence, spatial computing, cloud analytics, machine learning, hardware
and software distribution, value added customized logistics services, sustainable smart city systems and AgTech. We will consider
a business combination outside of our management’s areas of expertise if such business combination candidate is presented
to us and we determine that such candidate offers an attractive acquisition opportunity for our company. In the event we elect
to pursue an acquisition outside of the areas of our management’s expertise, our management’s expertise may not be
directly applicable to its evaluation or operation, and the information contained in this annual report regarding the areas of
our management’s expertise would not be relevant to an understanding of the business that we elect to acquire. As a result,
our management may not be able to adequately ascertain or assess all of the significant risk factors relevant to such acquisition.
Accordingly, any stockholders or warrant holders who choose to remain a stockholder or warrant holder following our initial business
combination could suffer a reduction in the value of their securities. Such stockholders or warrant holders are unlikely to have
a remedy for such reduction in value.
Although we have identified general criteria and guidelines
that we believe are important in evaluating prospective target businesses, we may enter into our initial business combination with
a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial
business combination may not have attributes entirely consistent with our general criteria and guidelines.
Although we have identified general criteria
and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our
initial business combination will not have all of these positive attributes, including satisfying ESG considerations. If we complete
our initial business combination with a target that does not meet some or all of these criteria and guidelines, such combination
may not be as successful as a combination with a business that does meet all of our general criteria and guidelines. In addition,
if we announce a prospective business combination with a target that does not meet our general criteria and guidelines, a greater
number of stockholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with
a target business that requires us to have a minimum net worth or a certain amount of cash. In addition, if stockholder approval
of the transaction is required by applicable law or stock exchange rules, or we decide to obtain stockholder approval for business
or other reasons, it may be more difficult for us to attain stockholder approval of our initial business combination if the target
business does not meet our general criteria and guidelines. If we are unable to complete our initial business combination, our
public stockholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our
trust account and our warrants will expire worthless.
We may seek acquisition opportunities with an early stage
company, a financially unstable business or an entity lacking an established record of revenue or earnings, which could subject
us to volatile revenues or earnings, intense competition and difficulties in obtaining and retaining key personnel.
Many participants in the industries in
which we intend to focus our search for target businesses are early stage companies. To the extent we complete our initial business
combination with an early stage company, a financially unstable business or an entity lacking an established record of sales or
earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine. These risks include
investing in a business without a proven business model and with limited historical financial data, volatile revenues or earnings,
intense competition and difficulties in obtaining and retaining key personnel. Although our officers and directors will endeavor
to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant
risk factors. Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce
the chances that those risks will adversely impact a target business.
We are not required to obtain an opinion from an independent
investment banking firm or from an independent accounting firm regarding fairness. Consequently, you may have no assurance from
an independent source that the price we are paying for the business is fair to our company from a financial point of view.
Unless we complete our initial business
combination with a business that is affiliated with our sponsors, officers or directors, we are not required to obtain an opinion
from an independent investment banking firm that is a member of FINRA or from an independent accounting firm that the price we
are paying is fair to our company from a financial point of view. If no opinion is obtained, our stockholders will be relying on
the judgment of our board of directors, who will determine fair market value based on standards generally accepted by the financial
community. Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable,
related to our initial business combination.
Resources could be wasted in researching acquisitions
that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another
business. If we are unable to complete our initial business combination, our public stockholders may receive only approximately
$10.00 per share, or less than such amount in certain circumstances, on the liquidation of our trust account and our warrants will
expire worthless.
We anticipate that the investigation of
each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other
instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others.
If we decide not to complete a specific initial business combination, the costs incurred up to that point for the proposed transaction
likely would not be recoverable. Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete
our initial business combination for any number of reasons including those beyond our control. Any such event will result in a
loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge
with another business. If we are unable to complete our initial business combination, our public stockholders may receive only
approximately $10.00 per share, or less in certain circumstances, on the liquidation of our trust account and our warrants will
expire worthless.
Please see “— If third parties
bring claims against us, the proceeds held in the trust account could be reduced and the per-share redemption amount received by
stockholders may be less than $10.00 per share” and other risk factors herein.
We may have a limited ability to assess the management
of a prospective target business and, as a result, may effect our initial business combination with a target business whose management
may not have the skills, qualifications or abilities to manage a public company.
When evaluating the desirability of effecting
our initial business combination with a prospective target business, our ability to assess the target business’s management
may be limited due to a lack of time, resources or information. Our assessment of the capabilities of the target’s management,
therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected. Should
the target’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations
and profitability of the post-combination business may be negatively impacted. Accordingly, any stockholders or warrant holders
who choose to remain a stockholder or warrant holder following our initial business combination could suffer a reduction in the
value of their securities. Such stockholders or warrant holders are unlikely to have a remedy for such reduction in value.
The officers and directors of an acquisition
candidate may resign upon completion of our initial business combination. The departure of a business combination target’s
key personnel could negatively impact the operations and profitability of our post-combination business. The role of an acquisition
candidate’s key personnel upon the completion of our initial business combination cannot be ascertained at this time. Although
we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition
candidate following our initial business combination, it is possible that members of the management of an acquisition candidate
will not wish to remain in place. As a result, we may need to reconstitute the management team of the post-transaction company
in connection with our initial business combination, which may adversely impact our ability to complete an acquisition in a timely
manner or at all.
Since our initial stockholders will lose their entire
investment in us if our initial business combination is not completed (other than with respect to any public shares they may hold),
a conflict of interest may arise in determining whether a particular business combination target is appropriate for our initial
business combination.
In October 2020, our initial stockholders
purchased an aggregate of 7,187,500 founder shares for a capital contribution of $25,000. The number of founder shares issued was
determined based on the expectation that the founder shares represent 20.0% of the outstanding shares of common stock (not including
the shares of Class A common stock issuable upon exercise of the private placement warrants). The founder shares will be worthless
if we do not complete an initial business combination.
In addition, our initial stockholders purchased
an aggregate of 5,166,666 private placement warrants for a purchase price of $7,750,000, or $1.50 per warrant, that will also be
worthless if we do not complete our initial business combination.
The personal and financial interests of
our officers and directors may influence their motivation in identifying and selecting a target business combination, completing
an initial business combination and influencing the operation of the business following the initial business combination. This
risk may become more acute as the deadline for completing our initial business combination nears.
Cowen and Company, LLC may have a conflict of interest
in rendering services to us in connection with our initial business combination.
Pursuant to a Business Combination Marketing
Agreement, we have engaged Cowen and Company, LLC to provide certain specified services to us in connection with our initial business
combination, though such services will not include the provision of any M&A-related advisory services We will pay Cowen and
Company, LLC the Marketing Fee for such services upon the consummation of our initial business combination in an amount equal to,
in the aggregate, 3.5% of the gross proceeds of our IPO, including any proceeds from the full or partial exercise of the over-allotment
option. In the ordinary course of business, Cowen and Company, LLC and its affiliates may at any time hold long or short positions,
and may trade or otherwise effect transactions, for its own account and the accounts of customers, in the debt or equity securities
of us, our affiliates or other entities that may be involved in the transactions contemplated by the Business Combination Marketing
Agreement, and may provide advisory and other services to one or more actual or potential business combination targets, investors
or other parties to any business combination or other transaction entered into by us, for which services Cowen and Company, LLC
or one or more of its affiliates may be paid fees, including fees conditioned upon the closing of a particular business combination
or other transaction or transactions. This financial interest may result in Cowen and Company, LLC having a conflict of interest
when providing the services to us in connection with an initial business combination. See “Underwriting — Business
Combination Marketing Agreement.”
We may issue notes or other debt securities, or otherwise
incur substantial debt, to complete a business combination, which may adversely affect our leverage and financial condition and
thus negatively impact the value of our stockholders’ investment in us.
Although we have no commitments as of the
date of this annual report to issue any notes or other debt securities, or to otherwise incur outstanding debt following our IPO,
we may choose to incur substantial debt to complete our initial business combination. We have agreed that we will not incur any
indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies
held in the trust account. As such, no issuance of debt will affect the per-share amount available for redemption from the trust
account. Nevertheless, the incurrence of debt could have a variety of negative effects, including:
• our inability to pay dividends on our common stock;
We
may only be able to complete one business combination with the proceeds of our IPO and the sale of the private
placement warrants, which will cause us to be solely dependent on a single business which may have a limited number of products
or services. This lack of diversification may materially negatively impact our operations and profitability.
The net proceeds from our IPO and the sale
of the private placement warrants provided us with $[278,437,500] assuming no redemptions, after payment of the Marketing Fee of
$10,062,500, that we may use to complete our initial business combination (and prior to any post-IPO working capital expenses).
We may effectuate our initial business
combination with a single target business or multiple target businesses simultaneously or within a short period of time. However,
we may not be able to effectuate our initial business combination with more than one target business because of various factors,
including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements
with the SEC that present operating results and the financial condition of several target businesses as if they had been operated
on a combined basis. By completing our initial business combination with only a single entity our lack of diversification may subject
us to numerous economic, competitive and regulatory risks. Further, we would not be able to diversify our operations or benefit
from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several
business combinations in different industries or different areas of a single industry. Accordingly, the prospects for our success
may be:
This lack of diversification may subject
us to numerous economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular
industry in which we may operate subsequent to our initial business combination.
We may attempt to simultaneously complete business combinations
with multiple prospective targets, which may hinder our ability to complete our initial business combination and give rise to increased
costs and risks that could negatively impact our operations and profitability.
If we determine to simultaneously acquire
several businesses that are owned by different sellers, we will need for each of such sellers to agree that our purchase of its
business is contingent on the simultaneous closings of the other business combinations, which may make it more difficult for us,
and delay our ability, to complete our initial business combination. With multiple business combinations, we could also face additional
risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if
there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services
or products of the acquired companies in a single operating business. If we are unable to adequately address these risks, it could
negatively impact our profitability and results of operations.
We may attempt to complete our initial business combination
with a private company about which little information is available, which may result in a business combination with a company that
is not as profitable as we suspected, if at all.
In pursuing our acquisition strategy, we
may seek to effectuate our initial business combination with a privately held company. Very little public information generally
exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business
combination on the basis of limited information, which may result in a business combination with a company that is not as profitable
as we suspected, if at all.
Our management may not be able to maintain control of
a target business after our initial business combination. We cannot provide assurance that, upon loss of control of a target business,
new management will possess the skills, qualifications or abilities necessary to profitably operate such business.
We may structure our initial business combination
so that the post-transaction company in which our public stockholders own or acquire shares will own less than 100% of the outstanding
equity interests or assets of a target business, but we will only complete such business combination if the post-transaction company
owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires a controlling interest in
the target business sufficient for us not to be required to register as an investment company under the Investment Company Act.
We will not consider any transaction that does not meet such criteria. Even if the post-transaction company owns or acquires 50%
or more of the outstanding voting securities of the target, our stockholders prior to our initial business combination may collectively
own a minority interest in the post business combination company, depending on valuations ascribed to the target and us in our
initial business combination. For example, we could pursue a transaction in which we issue a substantial number of new shares of
common stock in exchange for all of the outstanding capital stock of a target, or issue a substantial number of new shares to third
parties in connection with financing our initial business combination. In such cases, we would acquire a 100% interest in the target.
However, as a result of the issuance of a substantial number of new shares of common stock, our stockholders immediately prior
to such transaction could own less than a majority of our outstanding shares of common stock subsequent to such transaction. In
addition, other minority stockholders may subsequently combine their holdings resulting in a single person or group obtaining a
larger share of the company’s stock than we initially acquired. Accordingly, this may make it more likely that our management
will not be able to maintain our control of the target business.
We do not have a specified maximum redemption threshold.
The absence of such a redemption threshold may make it possible for us to complete our initial business combination with which
a substantial majority of our stockholders do not agree.
Our amended and restated certificate of
incorporation does not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares
in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions, or any greater net
tangible asset or cash requirement which may be contained in the agreement relating to our initial business combination. As a result,
we may be able to complete our initial business combination even though a substantial majority of our public stockholders do not
agree with the transaction and have redeemed their shares or, if we seek stockholder approval of our initial business combination
and do not conduct redemptions in connection with our initial business combination pursuant to the tender offer rules, have entered
into privately negotiated agreements to sell their shares to our founders, officers, directors, advisors or any of their respective
affiliates. In the event the aggregate cash consideration we would be required to pay for all shares of common stock that are validly
submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed business combination
exceed the aggregate amount of cash available to us, we will not complete the business combination or redeem any shares, all shares
of common stock submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate business
combination (including, potentially, with the same target).
In order to effectuate an initial business combination,
blank check companies have, in the recent past, amended various provisions of their charters and modified governing instruments,
including their warrant agreements. We cannot assure you that we will not seek to amend our amended and restated certificate of
incorporation or governing instruments, including our warrant agreement, in a manner that will make it easier for us to complete
our initial business combination that some of our stockholders or warrant holders may not support.
In order to effectuate an initial business
combination, blank check companies have, in the recent past, amended various provisions of their charters and modified governing
instruments, including their warrant agreements. For example, blank check companies have amended the definition of business combination,
increased redemption thresholds, extended the time to consummate an initial business combination and, with respect to their warrants,
amended their warrant agreements to require the warrants to be exchanged for cash and/or other securities. We cannot assure you
that we will not seek to amend our charter or governing instruments or extend the time to consummate an initial business combination
in order to effectuate our initial business combination. To the extent any such amendment would be deemed to fundamentally change
the nature of any of our securities, we would register, or seek an exemption from registration for, the affected securities.
Because we must furnish our stockholders with target business
financial statements, we may lose the ability to complete an otherwise advantageous initial business combination with some prospective
target businesses.
The federal proxy rules require that
a proxy statement with respect to a vote on a business combination meeting certain financial significance tests include historical
and/or pro forma financial statement disclosure in periodic reports. We will include the same financial statement disclosure in
connection with our tender offer documents, whether or not they are required under the tender offer rules. These financial statements
may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United
States of America, or GAAP, or international financial reporting standards as issued by the International Accounting Standards
Board, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance
with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB. These financial statement requirements
may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements
in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial business
combination within the prescribed time frame.
Our search for a business combination, and any target
business with which we ultimately consummate a business combination, may be materially adversely affected by the coronavirus (COVID-19)
pandemic and other events, and the status of debt and equity markets.
The COVID-19 pandemic has adversely affected,
and other events (such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) could adversely
affect, the economies and financial markets worldwide, and the business of any potential target business with which we consummate
a business combination could be materially and adversely affected. Furthermore, we may be unable to complete a business combination
if concerns relating to COVID-19 continue to restrict travel, limit the ability to have meetings with potential investors or the
target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a
timely manner. The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which
are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and
the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other events (such as
terrorist attacks, natural disasters or a significant outbreak of other infectious diseases) continue for an extensive period of
time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate
a business combination, may be materially adversely affected.
In addition, our ability to consummate
a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events
(such as terrorist attacks, natural disasters or a significant outbreak of other infectious diseases), including as a result of
increased market volatility, decreased market liquidity in third-party financing being unavailable on terms acceptable to us or
at all.
As the number of special purpose acquisition companies
evaluating targets increases, attractive targets may become scarcer and there may be more competition for attractive targets. This
could increase the cost of our initial business combination and could even result in our inability to find a target or to consummate
an initial business combination.
In recent years, the number of special
purpose acquisition companies that have been formed has increased substantially. Many potential targets for special purpose acquisition
companies have already entered into an initial business combination, and there are still many special purpose acquisition companies
seeking targets for their initial business combination, as well as many such companies currently in registration. As a result,
at times, fewer attractive targets may be available, and it may require more time, more effort and more resources to identify a
suitable target and to consummate an initial business combination.
In addition, because there are more special
purpose acquisition companies seeking to enter into an initial business combination with available targets, the competition for
available targets with attractive fundamentals or business models may increase, which could cause targets companies to demand improved
financial terms. Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical
tensions, or increases in the cost of additional capital needed to close business combinations or operate targets post-business
combination. This could increase the cost of, delay or otherwise complicate or frustrate our ability to find and consummate an
initial business combination and may result in our inability to consummate an initial business combination on terms favorable to
our investors altogether.
Changes in the market for directors and officers liability
insurance could make it more difficult and more expensive for us to negotiate and complete an initial business combination.
In recent months, the market for directors
and officers liability insurance for special purpose acquisition companies has changed. The premiums charged for such policies
have generally increased and the terms of such policies have generally become less favorable. There can be no assurance that these
trends will not continue.
The increased cost and decreased availability
of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate an initial business
combination. In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a public
company, the post-business combination entity might need to incur greater expense, accept less favorable terms or both. However,
any failure to obtain adequate directors and officers liability insurance could have an adverse impact on the post-business combination’s
ability to attract and retain qualified officers and directors.
In addition, even after we were to complete
an initial business combination, our directors and officers could still be subject to potential liability from claims arising from
conduct alleged to have occurred prior to the initial business combination. As a result, in order to protect our directors and
officers, the post-business combination entity will likely need to purchase additional insurance with respect to any such claims
(“run-off insurance”). The need for run-off insurance would be an added expense for the post-business combination entity,
and could interfere with or frustrate our ability to consummate an initial business combination on terms favorable to our investors.
If our management team pursues a company with operations
or opportunities outside of the United States for our initial business combination, we may face additional burdens in connection
with investigating, agreeing to and completing such combination, and if we effect such initial business combination, we would be
subject to a variety of additional risks that may negatively impact our operations.
If our management team pursues a company
with operations or opportunities outside of the United States for our initial business combination, we would be subject to risks
associated with cross-border business combinations, including in connection with investigating, agreeing to and completing our
initial business combination, conducting due diligence in a foreign market, having such transaction approved by any local governments,
regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.